For C.M. Smith and Sons Ltd. Foundry Division, Nadiad Plant done operation analysis using networking techniques, done Process Failure Mode and Effect Analysis to analyze production Failure, to manage raw material problem find EOQ and Safety Stock for each inventory used in foundry Division and also analyze safety provision which mention in The Factory Act 1948.

1. A
SUMMER TRAINING REPORT
ON
“OPERATION, FAILURE AND SAFETY ANALYSIS ALONG WITH
INVENTORY MANAGEMENT”
FOR
“C.M. SMITH AND SONS LIMITED
NADIAD PLANT - FOUNDRY DIVISION”
Submitted to
Anand Institute of Management
Under The Guidance Of
SNEHAL BHATT
Assistant Professor, AIM
Prepared By
UTKARSH AMARAVAT
ENROLLMENT NO: - 127020592003
MBA SEMESTER III
YEAR: 2013
Anand Institute of Management
M.B.A. PROGRAMME, OPPOSITE TOWN HALL, NEAR GRID, ANAND

2. i
PREFACE
As undergoing the course of Masters of Business Administration in Gujarat Technological
University, This summer training project report has been prepared in partial fulfillment of the
requirement of academic where one can get opportunity to face the real working environment
and to learn practical aspect of management.
Before finishing MBA and going in practical world, it is necessary to learn how actually
Company run. I take Marketing as specialization in MBA and to do marketing its necessary
one can have product, so to know more about Production do my training in C.M. Smith and
Sons Ltd., Nadiad Plant. Foundry is provide product for marching and one of the technique to
produce raw material, and to learn foundry all activity in practical manner do this project in
particularly Foundry Division. It was a complete learning and research process throughout my
training. I had a very memorable and worthy experience with the company.
The rationale behind doing the project work is to study, analyze and solve problem occurred in
C.M. Smith and Sons Ltd., Nadiad Plant – Foundry Division to make it more effective and
efficient to achieve its goals.

3. ii
ACKNOWLEDGEMENT
It was indeed an opportunity for me to prepare a project report on Production Management for
C.M. Smith and Sons Ltd. during the Summer Trainning Project for M.B.A. programme. My
heartful thanks to Mr. Akash Shah, my project guide and Mr. Snehal Bhatt who helped me to
bring out this project in good manner with them precise suggestion and rich experience. I
gratefully acknowledge my sincere thanks to my friends who help me in this project when
needed.
I am extremely thankful to Mr. Nirav Trivedi (HR Manager) and other C.M. Smith and Sons Ltd.
other employees and management for them constant support and encouragement throughout
the project and especially for provide me data and give me time when needed for this project.

4. iii
DECLARATION
I, UTKARSH AMARAVAT hereby declare that the report on “Summer Trainning” entitled
“OPERATION, FAILURE AND SAFETY ANALYSIS ALONG WITH INVENTORY
MANAGEMENT” is a result of my own work and my indebtedness to other work Publications, if
any, have been duly acknowledgment.
Place: - Anand, Gujarat, India
Date: - 24/07/2013
Utkarsh Amaravat

5. iv
LIST OF TABLES
Table No. Table Description Page No.
1.1 Company Profile 1
7.1 Shift wise Production Plan Analyses 24
7.2 Overall Production Plan Analyses 24
7.3 Problem in achieving Production Plan 25
7.4 Hypothesis testing 1 28
8.1 Production Activities 30
8.2 Observed Duration 32
8.3 Expected Time for Activities 33
8.4 Expected Time for Activities for Batch Production 35
8.5 Critical Path Calculation 40
8.6 Total Float for all activities 41
8.7 Variance for Critical Activities 43
8.8 Hypothesis Testing 2, One Sample Test 45
9.1 Severity Rating Scale Description 47
9.2 Occurrence Rating Scale Description 47
9.3 Probability of Failure occurred 48
9.4 Detection Rating Scale Description 49
9.5 Process Failure and Effect Analysis Sheet 50
10.1 Quantity received and Inventory demand / day 55
10.2 Safety Stock for Inventories 58
10.3 Ordering Cost for inventories 60
10.4 Inventory Handling Cost / day 63
10.5 Security Cost / day 64
10.6 Storing Cost / day 66
10.7 Insurance Cost / day 68
10.8 For Inventories other than in store Electricity Charges / day 69
10.9 Store electricity charges / day 70
10.10 Electricity Cost / day 71
10.11 Carrying Cost / day 73
10.12 EOQ for Inventories 74
10.13 Number of orders / month 76
10.14 Level of Inventories 79
10.15 Hypothesis Testing 3 83

6. v
LIST OF FIGURES
Figure No. Figure Description Page No.
1.1 Organization Structure 3
2.1 Plant Layout 9
2.2 Production process 10
2.3 Black Sand Plant Process 14
7.1 Shift wise Production Plan vs. Actual Graph 24
7.2 Overall per day Production Plan vs. Actual Graph 25
7.3 Shift wise Production Problem Occurrence Graph 26
7.4 Overall per day Production Problem Occurrence Graph 26
7.5 Plan vs. Actual Output Comparison Graph 28
8.1 Network Diagram 39
8.2 Gantt Chart 42
9.1 PFMEA Components 46
10.1 Carrying Cost Elements 62
10.2 Various Inventory Level 77

7. vi
TABLE OF CONTENTS
Page No.
Preface i
Acknowledgement ii
Declaration iii
List of Tables iv
List of Figure v
Table of Contents vi
1 About the Company
1.1 Company Profile 1
1.2 Vision and Mission Statement 2
1.3 Milestone since Inception 2
1.4 Present Man Power Status 3
1.5 Organization Structure 3
1.6 Types of Communication Channel 4
1.7 Company Believes 4
1.8 Company Philosophy 4
2 Production Department
2.1 Introduction 6
2.2 Company Products 6
2.3 Foundry Division Strength 6
2.4 Raw Inventory 7
2.5 Plant Layout 8
2.6 Production Process 10
2.7 Material Handling Equipment 12
2.8 Foundry store and Purchase 13
2.9 Black Sand Plant Process 13
2.10 Foundry Division Quality Assurance Measures 15
3 Literature Review 16
4 Signification of Study 19

8. vii
5 Research Hypothesis 20
6 Research Methodology
6.1 Problem Statement 21
6.2 Objectives of the Study 21
6.3 Research Design 21
6.4 Data collection Method 21
6.5 Sampling Method 21
6.6 Sampling Unit 22
6.7 Sample Size 22
7 Production Plan and Problems
7.1 Introduction 23
7.2 Production Plan Analyses 23
7.3 Problems in achieving Production Plan 25
7.4 Hypothesis Testing 27
7.5 Chapter Summery 29
8 Operation Analysis using Networking Techniques
8.1 Introduction 30
8.2 Production Operations/Activities 30
8.3 Observed Activity Time 31
8.4 Expected Time for Activities 33
8.5 Expected Time for Activities for Batch Production 34
8.6 Network diagram and Critical Path 38
8.7 Calculation for total Float 40
8.8 Gantt Chart 41
8.9 Probability to complete less than Critical time 43
8.10 Hypothesis Testing 44
8.11 Chapter Summery 45
9 Process Failure Mode and Effect Analysis
9.1 Introduction 46
9.2 PFMEA Components 46
9.3 Risk Priority Number (RPN) 49
9.4 Process Failure Mode and Effect Analysis sheet 53
9.5 Chapter Summery 53

9. viii
10 Inventory Management
10.1 Introduction 54
10.2 Quantity received per order and demanded per day 54
10.3 Safety Stock 57
10.4 Ordering Cost 58
10.5 Carrying Cost 62
10.6 Economic Order Quantity (EOQ) 72
10.7 Number of orders 75
10.8 Various Inventory levels 77
10.9 Hypothesis Testing 82
10.10 Chapter Summery 84
11 Safety Analysis
11.1 Introduction 85
11.2 Safety Analysis based on the Factory Act, 1948 Safety Provision 85
11.3 Chapter Summery 90
12 Scope for further study 91
13 Conclusion and Suggestions 92
Bibliography ix

10. Chapter 1
About the Company

11. 1
1.1. Company Profile
Table 1.1 Company Profile
Company Name: C.M. Smith and Sons Ltd.
Company Logo:
Founder: C.M. Smith
CEO: R.C. Smith
M.D. Ashwinbhai Smith
Contact Details: C.M. Smith and Sons Ltd.
Dashrath Wadi,
Court Road,
Nadiad – 387001
Gujarat, India
Tel: +91 268 2567285, 2566061
Fax: +91 268 2550094
Email: info@cmsmith.in
C.M. Smith and Sons Ltd. was established its manufacturing facility in 1943 and fully supplied
since 1957. C.M. Smith and Sons Ltd. presently manufacture & Supplies machined parts for
Passenger Cars, Utility Vehicles, Light-Medium-Heavy & Multi Axle Vehicles, Trailer parts,
Engineering Industries etc. C.M. Smith and Sons Ltd. are an ISO 9001 & TS 14696
certifications Company with a State of the Art Manufacturing facility and a distinguished brand
new Administrative block.
C.M. Smith and sons Ltd. have three fully computerized foundry with high pressure moulding line,
computerized sand plant, pressurized pouring furnace and supported by full fledge modern inspection
facilities like Spectrometer, Image Analyzer, Tensile, Elongation, Simulation etc. and
Highly sophisticated machine-shop equipped with worlds best branded VMC, HMC, VTL and
Turning Producing Gray Cast Iron and Ductile Iron (Nodular Iron).
C.M. Smith and Sons ltd. have presently Catering Export Market at U.S.A., Italy, Germany, South
Africa, East Africa, Saudi Arabia, Australia, U.K. etc. and have Major Customers Like Tata Motors
Limited, Tata Cummins Limited, Volvo-Eicher Motors Limited, Ashok Leyland Limited, American Axles
Limited, Automotive Axle Limited, Mahindra & Mahindra Limited, Fairfield, ThyssKrupp, etc.

12. 2
1.2. Vision and Mission Statement
1.2.1. Company Vision and Value
C.M. Smith and Sons Ltd. believe in the honesty, fairness, respect, and quality that underlie
their everyday activities. By using utmost honesty and fairness, we treat our customers with
the same respect that we want and appreciate. It is our duty as a manufacturer to provide high
quality products that surpass the needs and requirements of the customer in order to provide
long lasting relationships.
1.2.2. Company Mission
C.M. Smith and Sons Ltd. strives in all words in actions,
1. To create a supportive and fair work environment.
2. To provide friendly, courteous service to our customers.
3. To ensure the highest standards of product quality.
4. To be fair, honest, and considerate with our suppliers.
5. To be an active and positive force in the communities where we do business.
1.3. Milestones since Inception
C.M. Smith and Sons Ltd. achieving following milestone and awards since Inception,
1. Best Vendor for casting and machining award from Volvo - Eicher Commercial Vehicle
Ltd.
2. Best Vendor for new product development award from Volvo - Eicher Commercial
Vehicle Ltd.
3. Life time achievement award from Tata Motors Ltd.
4. Appreciation letter from Volvo - Eicher Commercial Vehicle Ltd. (Pithampur) and
Fairfield Mfg. Inc. (USA) for competitiveness in CQD (Cost, Quality & Delivery).
5. Appreciation letters from Tata Motors Ltd. for exceptionally fast developments of any
part.
6. First OE parts foundry cum machine shop Company in Gujarat to get TS - 16949 in
2004.
7. Continued business since more than 40 years with Mahindra & Mahindra Ltd. (Mumbai)
& Tata Motors Ltd.
8. Provided technical collaboration for 2 foundry plants out of India.

13. 3
9. 100 % Parts supplied to all OEM's declared DOL status due to highly consistent quality.
1.4. Present Man Power Status
Without Man Power production house particularly Foundry can’t run. In C.M. Smith and Sons
Ltd. around 300 Human Resource are working in 3 shifts as operator, helper and staff. These
300 employees are work in Foundry, Machining and Administrative office.
1.5. Organization Structure
C.M. Smith and Sons Ltd. organization Structure is as shown in fig. 1.1. In Company Nadiad
plant mainly two divisions Marching and Foundry. Along with this Company have HR
Department which deal with human requirement as production (For more information regarding
HR Department Refer Chapter 2). In Company Nadiad plant not has separate Marketing and
Finance Department. In Company Nadiad Plant has Administrative Department which deals
with worker wages and employee Salary; also maintain plant sales Information.
Fig. 1.1 Organization Structure
Chairman
M.D.
C.T.O. GM/DGM
Admin
Sales &
Mkt.
All Plant Head
Nadiad
Sr. Manager
Production/Machining
Manager QA/SPC
Manager
Maintenance
Manager Electrical
Sr. Manager Foundry
Manager Metrology
Manager Foundry QA
Bhumel ZAK GIDC
Account
Sr. Manager
Account &
Finnance

14. 4
1.6. Types of Communication Channel
For Internal Communication purpose C.M. Smith and Sons Ltd. used Intranet (LAN
connection) and all employees working in Company have own Intranet Id, Company also have
general Notice board for communication purpose with workers and some time used mouth
communication if required; And For External Communication with other plants, suppliers and
clients C.M. Smith and Sons ltd. used Internet.
1.7. Company Believes
C.M. Smith and Sons Ltd. believe in following things to run business successfully and maintain
good atmosphere inside Company.
1. Customer Satisfaction Enhancement
2. 100% On-time Delivery to Customer
3. Better Quality Level by Continuous Improvement in all fields
4. Increase in Sales by Better Quality and thereby profit margins
5. Increase in Productivity
6. Better Rejection Control
7. Reduction in Cost
8. Minimum Development Time
9. Optimum Use of Facilities & Resources
10.Better House Keeping
11.Employee development
12.Vendor development
13.Reduction in waste & variation
1.8. Company Philosophy
1.8.1. Managerial Ethics
C.M. Smith and Sons Ltd. business ethics are based on Integrity and Commitment towards
achieving organizational goals. Company code of Ethics is enshrined in the values of good
Humanity and Governance.
1.8.2. Leadership
In C.M. Smith and Sons Ltd. Leadership will encourage & foster Leadership with a Vision to
focus on leveraging opportunities and meeting Challenges.

15. 5
1.8.3. Customer Satisfaction
C.M. Smith and Sons ltd. are committed to their customers our success with their Customer
satisfaction by attaining, delivering and maintaining the highest standards of Quality & Cost
effective Services and Products.
1.8.4. Employee Engagement
1. C.M. Smith and Sons ltd. ensuring fair Recruitment, enhanced Performance,
Promotions, and improved Quality of Life for employees and their family members.
2. C.M. Smith and Sons ltd. ensuring Care for each other, Transparency & Trust with
focus on institutionalizing the collective Initiatives of all.
3. C.M. Smith and Sons ltd. ensuring Job Rotation, Job Enrichment, Training and Re-
training, Career & succession planning, across the hierarchy.
4. C.M. Smith and Sons ltd. enabling each employee to develop to his or her full potential
with a shared sense of direction with a well-defined accountability and responsibility.
5. C.M. Smith and Sons ltd. enabling each employee to evolve into self starter Team
Leader and meet the fast changing business environment and maintain a competitive
edge.
1.8.5. Communication
C.M. Smith and Sons ltd. focus is to facilitate free flow of communication with trust on People
and Policy and evolve a participative work environment.
1.8.6. Concern for Environment
C.M. Smith and Sons ltd. are committed to preserve & protect their ecological environment and
their heritage. Company will do this by adopting an environment friendly attitude and promoting
practices that enhance their esteem.
1.8.7. Entrepreneurship
C.M. Smith and Sons ltd. are committed to develop an Entrepreneurial work culture by
fostering an in-depth knowledge of their core businesses and then attendant opportunities so
that all their employees can be trustees of their Stakeholders.

16. Chapter 2
Production Department

17. 6
2.1. Introduction
Production is the functional area responsible for turning inputs into finished outputs through a
series of production process. For any Manufacturing Company production department is like
heart for their organization. In any Company Production department is deal with their
Production and Planning, Inventory purchase, Inventory storing, Product design, Production
technical support and also with product quality aspects.
C.M. Smith and Sons Ltd. is one of the leading foundries in country which have well
established portion house. In C.M. Smith and Sons /Ltd. Nadiad Plant Company production
house is mainly using divide in to two processes Foundry and Machining. In foundry using
casting Company make product structure but not precise dimension. After casting using
machining Company achieve superior product quality in dimension. Company Machining
Division have complete final finishing on fully computerized VMC / HMC / VTL / Turning
Centers of Worlds best branded equipments, but this whole research is based on Foundry so
mainly focus on Foundry Division means not consider machining here.
2.2. Company Products
C.M. Smith and Sons Ltd. have wide variety of products which used in automobiles particularly
light and heavy transportation vehicle. These products are as shown below which Company
able to manufacture with best use of technology.
1. Brake Disc
2. Brake Drum
3. Hubs
4. Cylinder Block
5. Clutch Housing
6. Diff Carrier Housing
7. Diff Case
8. Bell Housing
9. Flywheel Housing
10.Flywheel with Ring Gear Fitted
11.Timing Gear Case
12.Gear Box Housings
13.Electric Motor Body
14.Intermediate Housings
15.Flanges
16.Brake Shore Housing
17.Hanger Shackle
18.Hanger Pad
2.3. Foundry Division Strength
C.M. Smith and Sons Ltd. Foundry Division have following Strength, not just required to
maintain it and utilize it properly until new strength developed by Company to achieve its plan
for production.

18. 7
1. Black Sand plant (Refer Section 4.8) is asset for Foundry Division, which increase
speed and automatically work so reduce man powers.
2. Railway track which increase mould box transmission speed and reduce risk which
create if it handle by crane.
3. All machines which in Foundry Division like Alpha 450, Alpha 900, Compacor, Sort
Blasting Machine, etc are provide this division rigid solidity in terms of technology
advantage and quickest output.
4. Pattern and dies which available in lots of variety, that’s pattern designing and making
time is save and workers are aware about pattern so output rate increase.
2.4. Raw Inventory
C.M. Smith and Sons Ltd. Foundry Division used various raw materials for its production as
shown below list of Inventories. Company has separate purchase and store department to
control its raw Inventories. One cans Refer Chapter 12 to get perfect idea of Company
Foundry Division Inventories and its Management.
1. Wash Sand
2. Moulding Sand
3. Coal Dust
4. Bentonite Powder
5. Pig Iron
6. MS Scrap
7. Company Inside and Outside Rejection
8. Hardener
9. Raisin
10.Min and CO2 Gases
11.Collide Paste and Thinner
12.Sildrone Acid
13.Mould Filter
14.Carbon
15.Fe-Silicon
16.Fe- Mn
17.Iron Sulphur
18.Slag fix Powder
19.Ferro Inoculants Powder

19. 8
2.5. Plant Layout
C.M. Smith and Sons Ltd. Foundry Division Plant layout is as shown in Fig. 2.1 and Company
have sufficient plant with every required facility which one foundry required.
In this Layout following indicates,
C0 : Induction Furnace Controller
C : Furnace Movement Controller
A and B : Induction Furnace
Ch : Chill Making
R : Reactor
Com : Compressor
D : Disk Break Core Maker
TG : Timing Gear Core Maker
CT : Collide paste and Thinner Mixer
CTS : Collide Paste and Thinner mixer temporary Store
S : Sort Storing
P : Packaging Material Store

20. 9
Fig 2.1 Plant Layout

21. 10
2.6. Production Process
C.M. Smith and Sons Ltd. Foundry Division Production are finish using various steps and
Production process flow chart is as shown in Fig 2.2

22. 11
Company Production process have 4 different separate start in which Wash Sand Core
making process, Mould Sand Core making process, Moulding Black Sand Process and melting
process which combine afterward and production run on single line (Refer Fig 2.2).
In Wash Sand Core Making process, for 200 Kg Wash Sand mixing purpose 50 Liter each
Hardener and Raisin are mixed with Wash Sand and during Core making in Compacor
Machine add Min Gas at high pressure and at 70 °C temperature for 2 second adding per Kg
bases. In Compacor machine Core die are ready so using high pressure and temperature
Core are prepared. This Wash Sand Core Making process is half way automated means man
and machine both required, while Mould Sand Core Making process is fully manually. For
Mould Sand Core Making process, Mould Sand and Sildrone Acid mixer is prepared where for
2000 Kg Mould Sand 4 Liter Sildrone Acid are used, during manually Core making process
using die for increase Hardness CO2 gas are used. This Moulding process is half way
automated means man and machine both required
In Black Sand Preparing Process Company used automatic Black Sand transportation /
recycling system, which collect Black Sand from various process like Wash and Mould Sand
Core rejection, from Moulding process, Decoreing Process and Sort Blasting process (Refer
Fig 4.2) and using Belt Conveyor and Bucket Elevator transfer this to Black Sand Mixer. In
Black Sand Mixer 26 Liter water, 15 Kg combine Coal dust and Bentonite Powder are mixed
with 650 Kg Black Sand to make it Suitable for Green Sand Foundry and after using conveyor
it transfer to Moulding Machine Alpha 450 and 900. In Moulding process mainly black Sand
used with Wash Sand Core and CO2 Core. For this process Company have two machine
Alpha 450 and Alpha 900 with different Capacity where Mould Filter used in every mould.
Melting process is carried out to melt material and using that material for further Pouring
process. Company has 2500 Liter capacity two furnaces but at one time only use one furnace.
Melting process one cycle take around 1 hour where at 1480 °C temperature material are melt
and in one cycle 500 Kg each Pig iron and MS Scrap, 1500 Kg Rejection Return, 23 Kg
Carbon, 8 Kg Fe-Silicon, 2 Kg Fe-Mn and 1 Kg Iron Sulfur used. After melting using Ladle take
this melt material and Poring process is carried out where metal are poured in moulds.
After pouring metal in mould, Solidification process start where metal are settle down in mould
means simple cooling process but inside mould on railway track during mould transformation
only this process is carry out. Knock out process where settle mould are break using Knock

23. 12
out machine so Company get final Cast output for further use. This Knock out Cast is at higher
temperature so cooled it before further process.
After cooling of cast, Decoreing process are carried out where Runner and Riser are
separated from the mould which is guiding path for metal in to mould but not required in Cast.
This process is fully manually carried out. After that Sort Blasting process is done because on
cast sand particles are available which not required and if these transfers to machining division
machine are damage due to sand. So to clean cast from sand Sort Blasting process carried
out, where Sort are through against cast at 360°. And because of this sand particle which on
cast surface remove which collect in Dust Collector to supply back in Black Sand. After this
using Chipping process remove sharp edge or extra material cubic points or something which
on cast and after Inspection which done manually accepted cast are Dispatch further for
machining.
2.7. Material Handling Equipment
In C.M. Smith and Sons Ltd. Foundry Division various materials handling equipment is used to
carry material. All equipments or ways that used are as follows –
2.7.1. Air Pressure
In Wash Sand Core making process, to transfer Wash Sand after cleaning to Wash Sand
mixer which at height air pressure are used, so Wash Sand which are light in weight easily
transfer to Wash Sand Mixer at height.
2.7.2. Bucket Elevator
In Black Sand plant Bucket Elevator are used to transfer Black Sand at height. Sand and Black
Sand after used in various processes are required to carry at height for further process like
cleaning, Mixing and supply to Moulding process, that’s why to transfer Black Sand vertically at
height Bucket Elevator are used (Refer Fig 2.3).
2.7.3. Belt Conveyor
In Black Sand plant to transfer Black Sand horizontally and on incline Belt Conveyor are used.
Black Sand after used in various processes using hopper come on Belt Conveyor which supply
it to Bucket Elevator and also at height various transmissions Belt conveyor used like for mixer
to moulding machine (Refer Fig 2.3).

24. 13
2.7.4. Crane and lifter
Crain and lifter are used in every process after Sand preparation mostly like Moulding, Melting,
and Knock out, etc. Company have general crane but have machine separate crane with lifter
for easy work purpose.
2.7.5. Railway Track and guide ways
To supply heavy mould box to different process mostly all other Company use Crane, but C.M.
Smith and Sons Ltd. have 10 railway track for mould box supplement purpose which increase
work speed. Using Railway Track and supportive guide ways mould box supply between
process like Moulding, Pouring, Solidification (On track itself) and Knock Out.
2.7.6. Four clip truck
Four Clip Truck is used to supply material from in or out in plant Foundry Division means
transfer raw material in side Foundry and for Dispatch finish goods Four Clip Truck are used.
2.8. Foundry store and Purchase
C.M Smith and Sons ltd have separate purchase and store for production, but based on
requirement means production plan not purchase material and not store also which create lots
of problems in achieving plan (Refer Chapter 7). Actually according to this purchase and store
Company financial condition is responsible for it means not able to invest more in materials
and this create problems (Refer Chapter 7).
Company Store and Purchase have yard and storing area also and they make record based
on shift. Records are maintaining in two ways manually and computerized. To maintain
records used MS Office Excel sheet only. If Company make this system fully computerized
and if make particular software then able to make it more effective.
2.9. Black Sand Plant Process
Company have black sand automatic plant which process is as shown in Fig. 2.3 which work
on continuous bases automatically to supply Black Sand for moulding.

25. 14
Fig 4.3 Black Sand Plant Process
Black Sand from Alpha 450, Alpha 900 and knock out
Belt Conveyor 14
Belt Conveyor 6
Bucket Elevator 7
P.C.
Hopper
Belt Conveyor 11
Hopper
Belt Conveyor 13
Belt Elevator 14
Belt Conveyor 15
Bucket Elevator 19
Belt Conveyor 20
Belt Conveyor 31
Alpha 900
Belt Coveyor 32
Alpha 450

26. 15
2.10. Foundry Division Quality Assurance Measures
Quality is more important aspect in term of satisfying Clients /Customer requirements. C.M.
Smith and Sons Ltd. Foundry Division have following facility to measure Quality of product
which makes this division more effective, however mostly prefer visual Inspection only.
1. Spectrometer
2. Simulation Software
3. Image Analyzer
4. Tensile, Elongation, Transverse bending
5. BHN
6. Online Sand Test
7. Moisture control in cooler
8. Magnetic Crack Detector
9. X - Ray test on request
10.Complete sand test equipments
11.Complete Cold Box / Shell Core parameters test equipments
12. Casting Layout
13.Casting Cross Section Cutting

27. Chapter 3
Literature Review

28. 16
1. Saputra Y A and Ladamay O S A (2011) studied Project Reliability: Probability of a
Project meets its Quality-Cost-Time target under uncertainty.
The researchers find out that when project under uncertainty situation at that time
comprehensive evaluation on the Iron Triangle (Quality-Cost-Duration) is very
important.
2. Eveleens C (2010) studied a literature review of Innovation Process models and their
Implications.
The researcher concluded that the literature search for relevant models of innovation
processes has been extensive, but not very structured. With a high probability, it can be
said that most relevant literature was reviewed, but a second search or expert panel
need to confirm that.
3. Li L, Sourirajan K and Katircioglu K (2010) studied Empirical Methods for two-echelon
Inventory Management with service level constraints based on Simulation-Regression.
The researchers find out that the heuristic method give CDC service levels that provide
excellent cost performance compared to simulation-based optimization method.
4. Adeyemi S L and Salami A O (2010) studied Inventory Management: A tool of
Optimizing Resources in a Manufacturing Industry A Case Study of Coca-Cola Bottling
Company, Ilorin Plant.
The researchers concluded that the inventory management situation of the Nigeria
Bottling Company, Ilorin Plant has been revealed using the EOQ model and Company
well-built policy is able to handle its idle stock without incurring unnecessary costs.
5. Kloppenborg T J and Lavigne L K (2008) studied Project Scheduling Constraints – Best
methods and practices.
The researchers find out that in dealing with project scheduling constraints, best
practices, regardless of what methodology a solution is associated with, dominates.
6. Littlefield M and Shah M (2008) studied Manufacturing Operation Management.
The researchers find out that Appoint executive steering committee to define
manufacturing solution investment strategy and Adopt technology to automate quality,
execution, planning and scheduling, visibility and maintenance aspect of manufacturing
operation.

29. 17
7. Kidonge K K (2006) studied the Automation of Inventory Management Process.
The researcher concluded that the database will enable the update, retrieval, deletion
and generation of Inventory report accordingly. The complete implementation of
Inventory management system on stock items will yield significant advantages to the
organization.
8. Bakri A, Zin R M, Misnan M S and Mohammed A H (2006) studied Occupational Safety
and Health (OSH) Management Systems: Towards Development of Safety and Health
Culture.
The researchers find out that the company implemented OSH management system
have reported benefited from increased operational efficiencies, reduction in lost
workdays, fewer accidents and medical claims, recognition by insurers and regulators
and improved worker’s retention and satisfaction.
9. Chande A, Dhekane S, Hemachandra N and Rangaraj N (2005) studied the Perishable
Inventory Management and Dynamic Pricing using RFID Technology.
The researchers conclude that the proposed model for inventory control of perishable
products makes it possible to determine optimal timing for discount offer and also
optimal order quantity by using RFID technology.
10.Phimister J R, Oktem U, Kleindorfer P R and Kunreuther H (2003) studied Near-Miss
Incident Management in the Chemical Process Industry.
The researchers find out that a near-miss management framework that adds
operational and strategic value to corporate environmental, health and safety practice
so must focus on the details of the process.
11.Yusuf A M (2003) studied Inventory Control and EOQ in National Electric Power
Authority.
The researcher concluded that the primary objective of stores function is to provide a
service to the operating function and store cannot be run in isolation as most of items
kept in it represent capital which can strangulate an organization.
12.Wood D A (2002) studied Risk Simulation Techniques to aid Project Cost and Time
Planning and Management.
The researcher find out that Risk simulation techniques complement the deterministic
techniques of network and critical path analysis enabling rigorous models of project

30. 18
plans to be constructed, risk quantified and targets tested with sensitivities prior to the
plan being rolled out.
13.Kokoskie G (2001) studied A Comparison of Critical Chain Project Management
(CCPM) Buffer Sizing Techniques.
The researcher concluded that it is possible that some of the result can be attributed to
potential masking of project buffer consumption due to forced placement of feeding
buffers on the critical chain, it is unlikely because only a few of the networks had critical
chain plans with such a structure.
14.Fantozzi E (1996) studied A Strategic Approach to Supply Chain Event Management.
The researcher find out that PERT based network technique effectively used in supply
chain event management & all activities are not treating equal.
15.Villacourt M (1992) studied FMEA: A Guide for Continuous Improvement for the
Semiconductor Equipment Industry.
The researcher concluded that the failure modes included in the FMEA are the failures
anticipated at the design stage. As such, they could be compared with Failure
Reporting, Analysis and Corrective Action System (FRACAS) results once actual failure
are observed during test, production and operation.

31. Chapter 4
Signification of Study

32. 19
By doing this project work one can understand various aspect of Production Management, but
at same time this project help Company C.M. Smith and Sons Ltd. in following manner-
1. This project helps Company to analyze its foundry production as per shift and area of
problem which affect it.
2. This project help Company to find which foundry process time very most so its effect
overall production rate.
3. This project provide information to Company regarding foundry process failure which
most effect its production, so by reducing that failure Company can improve its
effectiveness.
4. This project help Company to identify its foundry Inventory safety stock and economic
order quantity for order based on it plan.
5. This project inform Company regarding its safety measures are as per industrial safety
act or not and which type of correction required to achieve all standard.

33. Chapter 5
Research Hypothesis

34. 20
1 Null Hypothesis: There is no difference in production plan and actual production in
Company.
Alternative Hypothesis: There is difference in production plan and actual production in
Company.
2 Null Hypothesis: There is no change in each process time whenever it perform
Alternative Hypothesis: There is change in each process time whenever it perform
3 Null Hypothesis: There is no difference in economy order quantity between actual
production and plan production.
Alternative Hypothesis: There is difference in economy order quantity between actual
production and plan production.

35. Chapter 6
Research Methodology

36. 21
6.1. Problem Statement
Operation, Failure and Safety Analysis along with Inventory Management in C. M. Smith and
Sons ltd., Nadiad Plant - Foundry Division.
6.2. Objectives of the Study
This research project is done to fulfill following objectives.
1. To analyze company production solidity to achieve its plan in foundry.
2. To analyze foundry process timing using networking technique to make it more solid in
achieving plan.
3. To analyze foundry process failure mode and its relevant effects on production.
4. To find safety stock, ordering cost, carrying cost and economic order quantity for Inventory
used in foundry division.
5. To analyze company safety standard in comparison of industrial safety act.
6.3. Research Design
In this research project based on different work used different research design. In Chapter 10
which helps to explore problems used Exploratory Research. In Chapters 11, 13 and 14 where
explore problem solution and safety aspect cover, And in Chapter 12 where one can find
failure effect with suitable solution used Descriptive Research.
6.4. Data collection Method
To collect data take help of observation, particularly participative observation. Observation is
Personal in nature and to analyze production solidity audit secondary past record data related
to production.
6.5. Sampling Method
In collection of data used convenience sampling method in selection of secondary past record
data. In observed process timing also used convenience sampling method and observed
process timing based on convenience.

37. 22
6.6. Sampling Unit
C.M. Smith and Sons Ltd. Foundry Division 12 month production record is sampling unit for
selection of secondary past record data and at same time every time process perform is also
sampling unit for observed record process timing data.
6.7. Sample Size
C.M. Smith and Sons Ltd. Foundry Division 3 month production record (10 March, 2013 to 11
June, 2013) is sample for secondary past record data and 10 times of each process out of
numbers of time each process done is sample for observed record process timing data.

38. Chapter 7
Production plan and Problems

39. 23
7.1. Introduction
Planning may be defined as deciding in advance what is to be done in future. While production
planning entails the acquisition and allocation of limited resources to production activities so as
to satisfy customer demand over a specific time horizon. Production plan are made by
considering work force level, future order delivery date, inventory level and machine or plant
condition, etc.
C.M. Smith and Sons Ltd. Foundry division done production planning on daily bases means
considering today’s condition tomorrow plan prepared. Company prefers SAP software for
production planning. This plan is made by considering work force level and future order mainly.
Inventory level and machine or plant condition is important factor but it considers as separate
factors which effect production plan. Production plan is different for all three shifts and
production plan made for shift work not for day work bases. Foundry division production
capacity is 420 units per shift so production plan is not above this limit. Production plan are
given to supervisor at starting of shift and at end of that shift supervisor report about actual
result of that plan with reason because of which he cannot achieve plan if that happen. In this
chapter production plan and its effected factors are analyze.
7.2. Production Plan Analyses
Note: This section is based on 10 March, 2013 to 11 June, 2013 production data.
7.2.1. Shift wise Production Plan Analyses
In C.M. Smith and Sons Ltd. Production plan are made shift wise to achieve whole day
production rate. But by analyze production data one can understand Company not able to
achieve it production plan (Refer Table 7.1 and Fig. 7.1). Company can’t able to achieve
production plan due to various reasons which discussed in this chapter in section 7.3.
Based on this data one can say that Company efficiency of fulfillment its plan is decreased per
shift means in shift 1 probability of plan fulfillment is 82.57 % that decrease in shift 3 and
become 60.68 %. This difference is 21.89 % which become bigger if one can see it on daily
bases. Company don’t used it full capacity while input for full capacity, this is one type of loss
incurred in company. Company have ability to make 420 units per shift but Company used only
its 51.62 % capacity in actual in shift 1 which reduced up to 26.64 % and become 24.98 % in
shift 3.

40. 24
Table 7.1 Shift wise Production Plan Analyses
Plant Capacity 420 units per shift
Shift 1 Shift 2 Shift 3
Plan 262 225 172
Actual Production 216 164 104
Probability of utilization of Capacity in Plan (%) 62.51 53.74 41.17
Probability of utilization of Capacity in Actual (%) 51.62 39.09 24.98
Probability of plan Fulfillment in actual (%) 82.57 72.73 60.68
Fig. 7.1 Shift wise Production Plan vs. Actual Graph
7.2.2. Overall Production Plan Analyses
Overall means per day average production plan reflects combination of shift wise production
plan. Same way overall also Company can’t able to achieve its production plan (Refer Table
7.2 and Fig 7.2). Company have ability to make 1260 units per day but Company plant to used
52.47 % of utilize its capacity (means 661 units) and actually utilize only 38.56 % of its
capacity (means 485 units). Company overall efficiency of fulfillment its plan in actual is 73.49
%.
Table 7.2 Overall Production Plan Analyses
Plant Capacity 1260 units per day
Plan 661
Actual Production 485
Probability of utilization of Capacity in Plan (%) 52.47
Probability of utilization of Capacity in Actual (%) 38.56
Probability of plan Fulfillment in actual (%) 73.49
262
225
172
216
164
104
0
50
100
150
200
250
300
Shift 1 Shift 2 Shift 3
Plan Actual

41. 25
Fig. 7.2 Overall per day Production Plan vs. Actual Graph
7.3. Problems in achieving Production Plan
Note: This section is based on 10 March, 2013 to 11 June, 2013 production data and problem
occurrence.
C.M. Smith and Son Ltd. Don’t able to achieve its production plan that means something not
going as per plan or problem in plan itself. Company make day to day plan by considering all
factor which affecting next day production but after all this also problem creates which affect
production and actual production rate is less than plan production rate. Here one tries to
analyze area of problem so one can focus on that problem area which effect more to
production rate. To do this analyses all problems related to any type of raw materials like
metal, wash sand, mould sand, work in progress inventory problem etc. are consider as
Inventory Problems, all problems related to machines or equipments like crane, alpha 450,
hopper, etc are consider as Maintenance problem and all problems related to work force
means less workers are consider as Man Power Problems. Inventory, Maintenance, Man
power and GEB Electricity Problems occurrences is as shown in Table 7.3, Fig. 7.3 and Fig.
7.4.
Table 7.3 Problem in achieving Production Plan
Shift 1 Shift 2 Shift 3 Overall
Inventory Problems 33 35.48% 29 30.53% 23 22.12% 85 29.11%
Maintenance Problems 44 47.31% 48 50.53% 38 36.54% 130 44.52%
Man Power Problems 13 13.98% 15 15.78% 39 37.5% 67 22.94%
GEB Electricity Problem 3 3.23% 3 3.16% 4 3.84% 10 3.43%
Total 93 95 104 292
661
485
0
100
200
300
400
500
600
700
Overall
Plan Actual

42. 26
Fig. 7.3 Shift wise Production Problem Occurrence Graph
7.3.1. Inventory Problems
Inventory Problems are problems related to raw materials like metal, wash sand, mould sand,
etc. or work in inventory problems. Inventory Problems majorly occurred 35.48 % in shift 1 and
reduced up to 13.36 % and become 22.12 % in shift 3 on papers but actually this problem
occurred at same rate in shift 3 also but due to other problem like Man Power increased
impact of this Inventory problem reduce so not mention. Overall 29.11 % problems out of total
problems are Inventory based problems. These problems occurred because company not
carries safety stock; actually not know all inventories safety stock level. This problems one
reason is Company financial condition also. Safety stock and Economic order quantity for all
major inventories used in foundry are discussed in detail in Chapter 10.
Fig. 7.4 Overall per day Production Problem Occurrence Graph
33
29
23
44
48
38
13 15
39
3 3 4
0
10
20
30
40
50
60
Shift 1 Shift 2 Shift 3
Inventory Problems MaintenanceProblems
Man Power Problems GEB ElectricityProblem
85
130
67
10
0
20
40
60
80
100
120
140
Overall
Inventory Problems MaintenanceProblems
Man Power Problems GEB ElectricityProblem

43. 27
7.3.2. Maintenance Problems
Maintenance Problems are problems related to machines or equipments like crane, alpha 450,
hopper, etc. Maintenance Problems occurrences chances are more than any other problem
occurrences chances. Overall 44.52 % problems out of total problems are Maintenance
problems. Actually C.M. Smith and Sons ltd. prefer Breakdown Maintenance concept (oldest
concept for maintenance). Company believes if machines or equipments are in running
condition everything all right but because of this same type of maintenance problem occurred
again and again. This problems one reason is Company maintenance department budget
also. Maintenance problems have one solution that company follow Preventive maintenance
concept so machines or equipments failure rate decreased.
7.3.3. Man Power Problems
Man Power problems are problems related to work force means less worker or no worker.
Without work force plant can’t run that means work force is most important factor which effect
production. Man Power Problems occurred 13.98 % in shift 1 and increased up to 23.52 % and
become 37.5 % in shift 3. In shift 3 major problems is work force. Overall 22.94 % problems
out of total problems are Man Power problems. After considering future leave Company make
plan for future but after that also Man Power Problem occurred. To solve this Problems
Company go for option of contract worker where salary based on fulfillment of work not based
on day of working.
7.3.4. GEB Electricity Problem
GEB Electricity Power cut Problem is not in Company hand. Overall 3.43 % problems out of
total problems are GEB Electricity problem. This problem is occurred quite low compare to
other problems so if company not find any solution for this like generator then also its not affect
like other problems.
7.4. Hypothesis Testing
Null Hypothesis: There is no difference in production plan and actual production in
Company.
Alternative Hypothesis: There is difference in production plan and actual production in
Company.

44. 28
Table 7.4 Hypothesis Testing 1
Days Plan Output Actual Output % Change Result H0,
Accept if % Change < 5 %
Reject if % Change > 5 %
81 53558 39361 26.51 Reject
Here assume more than 5 % change in Plan output and Actual output is not tolerated, means if
% Change is less than 5 % not reject Null Hypothesis other than this % Change is greater than
5 % reject Null Hypothesis.
For this Hypothesis testing take 81 days production Plan output and Actual output as data.
And In compare of Plan output find out % Change in Actual output as shown in Table 7.4
which find out using equation –
% Change =
Plant Output − Actual Output
Plan Output
∗ 100
=
53558 − 39361
53558
∗ 100
= 26.51 % > 5 % So Reject Null Hypothesis
Fig 7.5 Plan vs. Actual Output Comparison Graph
0
200
400
600
800
1000
1200
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79
Plan
Actual

45. 29
7.4.1. Interpretation
By referring % Change (Refer Table 7.4), one can know In compare with Plan output %
change in Actual output is greater than 5 % and using Fig. 7.5 Plan vs. Actual Comparison
Graph also clear that In C.M. Smith and Sons Ltd. Foundry Division lots of variation in plan
output every day and in compare with it lots of variation in Actual output also. Thus, Null
Hypothesis is rejected and it is concluded that there is difference in production plan and actual
production in Company.
7.5. Chapter Summery
In this Chapter analyze C.M. Smith and Sons Ltd. Foundry Division production data and find
out that Company is able to achieve only 73.49 % Production Plan due to various reason such
as Maintenance, Inventory, Man Power and Electricity Problems; And Company not run at full
Capacity, only 38.56 % utilize Actually.

46. Chapter 8
Operation Analysis using Networking Techniques

47. 30
8.1. Introduction
Operations Management is an area of management concerned with overseeing, designing and
controlling the process of production and redesigning business operation in the production of
goods or services. It involves the responsibility of ensuring that business operations are
efficient in terms of using as few resources as needed and effective in terms of meeting
customer requirements. An operation analysis is a procedure used to determine the efficiency
of various aspects of determines the efficiency of various aspects of a business operation and
this is an approach that helps managers improves the performance of their business activities.
C.M. Smith and Sons Ltd. Foundry Division able to achieve 73.49 % (Refer Chapter 7) of its
production plan in actual that mean something are going wrong in its Foundry Division
production process, which one can know using production process operation analysis. In this
Chapter timing is noted out for all operation used in production and based on that using
CPM/PERT project management networking techniques try to analyze whole production
process using networking diagram.
Note: In this chapter used process timing is noted by researcher in actual condition using stop
watch and as per convenience and all time observed and noted when product TCL on Alpha
900 machine and Marine on Alpha 450 machine are manufactured.
8.2. Production Operations/Activities
In C.M. Smith and Sons Ltd. Foundry Division total 21 processes carried out for production of
one Cast. Each process name is noted down as activities A to U as shown in Table 8.1. In this
preceding activity for each activity is noted out, activity not started before finishing of its
preceding activity.
Note: In this section consider important process only means if two processes run on parallel
bases consider maximum time process related to whole process.
Table 8.1 Production Activities
Activity Process Name/Description Preceding Activity
A Wash Sand Cleaning -
B Wash Sand Mixing A
C Core Making B
D Core Dressing and Inspection C

48. 31
E Core Deeping and Inspection D
F Mould Sand Mixing -
G CO2 Core Making F
H CO2 Core Deeping and Inspection G
I Alpha 450 Moulding Process E, H
J Alpha 900 Moulding Process E, H
K Melting Process -
L Ladle Filling K
M Pouring Process I. J, L
N Solidification M
O Mould Knock Out N
P Air Cooling O
Q Decoreing Cast P
R Sort Blasting Q
S Chipping R
T Inspection S
U Dispatching T
8.3. Observed Activity Time
For each activity perform in C.M. Smith and Sons Ltd. Foundry Division their time duration is
observed and noted out as shown in Table 8.2 for particular units as mention. All time are
noted using stop watch and converted them in to minute. As shown in Table 8.2 for each
activity time range is find out which help to know why Company not achieve its production plan
(Refer Chapter 7). If time range is more for activity then maximum chances plan become false for that
activity and plan not achieved. So Company should focus more to minimize time range for those activity
as early as possible using effective planning which required mainly for activities P, N and Q because
time range (in Min.) is 89.67, 34.99 and 17.18 respectively (Refer Table 8.2).

49. 32
TimeRange
(Min.)
0.6
0.95
0.57
0.55
0.33
3.39
1.02
0.37
0.5
0.91
1.05
1.04
2.79
34.99
0.2
89.67
17.18
2.52
0.53
0.81
1.26
Table8.2ObservedDuration
ObservedDuration(Min.)
10th
0.65
3.3
1.51
0.43
0.9
7.41
1.97
0.71
2.64
4.46
60.29
0.84
19.62
19.76
1.01
97.32
30.41
9.98
1.19
0.21
5.62
9th
0.078
3.45
1.73
0.55
0.88
6.87
2.47
0.89
3.02
4.93
60.24
1.29
18.35
42.67
1.08
55.76
32.23
10.34
1.24
0.17
5.1
8th
0.1
3.2
1.62
0.7
0.85
7.34
2.03
0.81
2.95
4.02
59.25
0.98
19.01
20.67
1.04
89.46
41.03
8.68
1.57
0.89
4.97
7th
0.083
3.15
1.55
0.35
0.9
4.21
1.87
0.57
2.89
4.89
60.13
1.47
20.02
7.68
1.03
75.53
36.75
11.2
1.46
0.19
4.78
6th
0.077
3.8
1.25
0.51
0.98
4.62
2.13
0.79
3.01
4.31
60.02
1.82
19.34
12.34
1.01
47.86
33.33
9.97
1.33
0.4
5.92
5th
0.057
3.5
1.82
0.45
0.81
6.92
1.93
0.53
2.53
4.53
59.98
1.35
18.98
8.56
1.12
30.89
28.45
10.11
1.72
0.25
5.69
4th
0.067
4.1
1.53
0.88
0.7
7.6
1.45
0.86
2.98
4.42
60.3
0.78
17.26
38.23
0.98
60.76
43.02
10.02
1.29
0.08
6.04
3rd
0.082
3.9
1.6
0.53
1.03
5.7
1.93
0.75
2.93
4.68
59.97
0.95
20.05
14.42
1.05
120.56
32.89
10.08
1.67
0.1
5.03
2nd
0.083
3.4
1.5
0.33
0.93
6.34
2.1
0.84
2.52
4.42
59.33
1.78
18.65
10.9
0.92
90.6
45.63
9.59
1.23
0.25
5.62
1st
0.05
3.16
1.7
0.4
0.88
7
2.06
0.9
2.6
4.58
60.2
0.87
19.45
34.6
1.03
60.23
30.23
10.03
1.38
0.17
5.43
Units
40Kg
200Kg
2Core
2Core
3Core
200Kg
4Core
4Core
1Mould
1Mould
2500Kg
1250Kg
45Mould
1Mould
1Mould
1Cycle
25Cast
20Cast
2Cast
1Cast
20Cast
Activity
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U

50. 33
8.4. Expected Time for Activities
By using Observed time for each activities (Refer Table 8.2) expected time is find out for units
as shown in table 8.3 using Optimistic Time, Most Likable Time and Pessimistic Time.
Optimistic Time is the minimum time in which that activity can completed means minimum time
out of observed time for each particular activity (Refer Table 8.2); Most likable Time for activity
is average time out of observed time for each particular activity (Refer Table 8.2) and
Pessimistic Time is the maximum time in which that activity can perform or completed means
maximum time out of observed time for each particular activity (Refer Table 8.2).
Table 8.3 Expected Time for Activities
Activity Units Optimistic
Time (Min.)
Most Likable
Time (Min.)
Pessimistic
Time (Min.)
Expected Time
(Min.)
A 40 Kg 0.05 0.1327 0.65 0.21
B 200 Kg 3.15 3.496 4.1 3.54
C 2 Core 1.25 1.581 1.82 1.57
D 2 Core 0.33 0.513 0.88 0.54
E 3 Core 0.7 0.886 1.03 0.88
F 200 Kg 4.21 6.401 7.6 6.24
G 4 Core 1.45 1.994 2.47 1.98
H 4 Core 0.53 0.765 0.9 0.75
I 1 Mould 2.52 2.807 3.02 2.79
J 1 Mould 4.02 4.524 4.93 4.51
K 2500 Kg 59.25 59.971 60.3 59.91
L 1250 Kg 0.78 1.213 1.82 1.24
M 45 Mould 17.26 19.073 20.05 18.93
N 1 Mould 7.68 20.983 42.67 22.38
O 1 Mould 0.92 1.027 1.12 1.025
P 1 Cycle 30.89 72.897 120.56 73.84
Q 25 Cast 28.45 35.397 45.63 35.94
R 20 Cast 8.68 10 11.2 9.98
S 2 Cast 1.19 1.408 1.72 1.42
T 1 Cast 0.08 0.271 0.89 0.342
U 20 Cast 4.78 5.42 6.04 5.42

51. 34
Expected Time is time in which maximum possibility activity can completed and Expected
Time for any activity is find out using equation –
Expected Time =
Optimistic Time + 4 ∗ Most Likable Time + Pessimistic Time
6
Example of Expected Time for Activity A –
Expected Time for Activity A =
0.05 + 4 ∗ 0.1327e + 0.65
6
= 0.21 Min.
In this same way find for each activity using above equation.
8.5. Expected Time for Activities for Batch Production
In C.M. Smith and Sons Ltd. Foundry Division production are done is batch because in some
process like melting take same time if it run for particular batch or for single product, That’s
why Company produced in batch and batch on hourly bases which decided by ability to make
number of mould in one hour.
Company has two moulding machine particularly Alpha 450 means activity I and Alpha 900
means activity J. and based on time consumption for one mould (Refer Table 8.2), In one hour
around 35 mould manufactured means 22 mould of Marine on Alpha 450 machine and 13
mould of TCL on Alpha 900 machine; And for other starting process consider minimum unit
which required to start further process. For 35 units Batch Expected Time for all activity is as
shown in Table 8.4. For following activity for batch production changes happen in units or in
time.
In Activity A: To start further Activity B – Mixing of Wash Sand 200 Kg Sand required, So In
place of 40 Kg for 200 Kg time is used which is 1.05 Min.
In Activity E: To start further Activity I and J only 2 Core required and 2 Core manufactured at
same time, so in place of waiting for 3rd
Core transfer 2 Core for further Activity I and J, which
take same time but need less two helpers.

52. 35
Table 8.4 Expected Time for Activities for Batch Production
Activity Process Name/Description Preceding
Activity
Units Expected
Time (Min.)
A Wash Sand Cleaning - 200 Kg 1.05
B Wash Sand Mixing A 200 Kg 3.54
C Core Making B 2 Core 1.57
D Core Dressing and Inspection C 2 Core 0.54
E Core Deeping and Inspection D 2 Core 0.88
F Mould Sand Mixing - 200 Kg 6.24
G CO2 Core Making F 8 Core 3.96
H CO2 Core Deeping and Inspection G 8 Core 1.48
I Alpha 450 Moulding Process E, H 22 Mould 60.00
J Alpha 900 Moulding Process E, H 13 Mould 60.00
K Melting Process - 2500 Kg 59.91
L Ladle Filling K 1250 Kg 1.24
M Pouring Process I. J, L 35 Mould 14.72
N Solidification M 35 Mould 22.38
O Mould Knock Out N 35 Mould 22.55
P Air Cooling O 35 Mould 73.84
Q Decoreing Cast P 35 Cast 50.32
R Sort Blasting Q 35 Cast 17.47
S Chipping R 35 Cast 24.85
T Inspection S 35 Cast 11.97
U Dispatching T 35 Cast 9.49
In Activity G and H: To start further Activity I and J - 8 CO2 Core required, So in place of 4
CO2 Core manufacturing and Core Deeping consider time for 8 CO2 Core manufacturing and
Core Deeping, for this multiply original time with 2.
In Activity I and J: By using these activities capacity of batch size decided; because further
melting Process -Activity K need 60 Min. so it’s necessary these activities also run for 60 Min.
and try to make maximum mould in this time.
To Find number of mould in 60 Min. for Activity I means from Alpha 450 machine –

53. 36
In 2.79 Min. Foundry Division can make 1 mould
So, In 60 Min Foundry Division can make ___ mould?
=
60 ∗ 1
2.79
≈ 22 mould
To Find number of mould in 60 Min. for Activity J means from Alpha 900 machine –
In 4.51 Min. Foundry Division can make 1 mould
So, In 60 Min Foundry Division can make ___ mould?
=
60 ∗ 1
4.51
≈ 13 mould
So total Company Foundry Division able to make 35 moulds batch in 60 Min.
In Activity M: This activity time is noted for 45 moulds pouring, but only 35 mould for poring
process. So to find pouring time for 35 moulds –
For 45 moulds pouring process required 18.93 Min.
So, For 35 moulds pouring process required ___ Min.?
=
35 ∗ 18.93
45
= 14.72 Minutes
In Activity N: This solidification process is done for 1 mould or number of moulds required
same time, so this process is carried out for 35 moulds.
In Activity O: In this activity for knock out process observed time for 1 mould, but here
Company have two knock out machine which work for Alpha 450 and Alpha 900 machine; And
consider maximum number of mould 22 with Alpha 450 machine, so to find knock out time for
22 moulds –
For 1 moulds knock out process required 1.025 Min.
So, For 22 moulds knock out process required ___ Min.?
=
22 ∗ 1.025
1
= 22.55 Minutes

54. 37
In Activity P: This cooling process is done for 1 Cast or number of Cast required same time,
so this process is carried out for 35 Cast.
In Activity Q: This activity time is noted for 25 Cast Decoreing, but here 35 cast for Decoreing
process. So to find Decoreing time for 35 cast –
For 25 cast Decoreing process required 35.94 Min.
So, For 35 cast Decoreing process required ___ Min.?
=
35 ∗ 35.94
25
= 50.32 Minutes
In Activity R: This activity time is noted for 20 Cast Sort blasting, but here 35 cast for Sort
blasting process. So to find Sort blasting time for 35 cast –
For 20 cast Decoreing process required 9.98 Min.
So, For 35 cast Decoreing process required ___ Min.?
=
35 ∗ 9.98
20
= 17.47 Minutes
In Activity S: This activity time is noted for 2 Cast Chipping, but here 35 cast for chipping
process. So to find Chipping time for 35 cast –
For 2 cast chipping process required 1.42 Min.
So, For 35 cast chipping process required ___ Min.?
=
35 ∗ 1.42
2
= 24.85 Minutes
In Activity T: This activity time is noted for 1 Cast Inspection, but here 35 cast for Inspection,
for this multiply original time with 35.
In Activity U: This activity time is noted for 20 Cast Dispatching, but here 35 cast for
dispatching, so to find Dispatching time for 35 cast –

55. 38
For 20 cast for dispatching required 5.42 Min.
So, For 35 cast for dispatching required ___ Min.?
=
35 ∗ 5.42
20
= 9.49 Minutes
Here In batch 35 units produced per hour means around 840 units Company able to
manufactured if all going well. So overall all operation speed is good such that if Company
want and everything all right Company can able to produce more than plan production 661
units (Refer Chapter 7).
8.6. Network diagram and Critical Path
Critical path is path with longest duration in completion of production process means maximum
time in which production process closed definitely or last due time for finish process, which find
out as shown in Table 8.5 and find out using Fig. 8.1.

56. 39

57. 40
Table 8.5 Critical Path Calculation
Path Activity Duration (Min.)
1-4-5-6-7-10-12-13-14-15-16-17-18-19-20-21-22 ABCDEIMNOPQRSTU 315.17
1-4-5-6-7-10-13-14-15-16-17-18-19-20-21-22 ABCDEJMNOPQRSTU 315.17
7-8-9-10-12-13-14-15-16-17-18-19-20-21-22 FGHIMNOPQRSTU 319.27
7-8-9-10-13-14-15-16-17-18-19-20-21-22 FGHJMNOPQRSTU 319.27
3-11-13-14-15-16-17-18-19-20-21-22 KLMNOPQRSTU 308.74
By using Table 8.5 one can know that maximum time duration for completion is 319.27
Minutes which on two path 7-8-9-10-12-13-14-15-16-17-18-19-20-21-22 (FGHIMNOPQRSTU)
and 7-8-9-10-13-14-15-16-17-18-19-20-21-22 (FGHJMNOPQRSTU). So here two critical path
and out of this two consider any one as critical path so consider 7-8-9-10-13-14-15-16-17-18-
19-20-21-22 (FGHJMNOPQRSTU) as critical path.
10.7. Calculation for total Float
The total float (TF) of an activity represents the amount of time by which it can be delayed
without delaying the completion time means it is the amount of free time associated with an
activity which can be used before, during and after the performance of that activity. As shown
in Table 8.6 it is find out using equation –
Total Float Time = Latest Start Time − Earliest Start Time
Example of Total Float Time for Activity A –
Total Float Time = 4.10 − 0
= 4.10 Minutes
Mostly Activity which on critical path have no total float, but activity like A has total float means
in this activity any problem occurrence for 4.10 Min. not effect completion time. In this same
way find Total Float for each activity using above equation and interpreted them.

58. 41
Table 8.6 Total Float for all activities
All activities times are in Minutes
Activity Preceding
Activity
Expected
Time
Earliest
Start
Earliest
Finish
Latest
Start
Latest
Finish
Total
Float
A - 1.05 0 1.05 4.10 5.15 4.10
B A 3.54 1.05 4.59 5.15 8.69 4.10
C B 1.57 4.59 6.16 8.69 10.26 4.10
D C 0.54 6.16 6.70 10.26 10.80 4.10
E D 0.88 6.70 7.58 10.80 11.68 4.10
F - 6.24 0 6.24 0 6.24 0
G F 3.96 6.24 10.2 6.24 10.2 0
H G 1.48 10.2 11.68 10.2 11.68 0
I E, H 60.00 11.68 71.68 11.68 71.68 0
J E, H 60.00 11.68 71.68 11.68 71.68 0
K - 59.91 0 59.91 10.53 70.44 10.53
L K 1.24 59.91 61.15 70.44 71.68 10.53
M I. J, L 14.72 71.68 86.40 71.68 86.40 0
N M 22.38 86.40 108.78 86.40 108.78 0
O N 22.55 108.78 131.33 108.78 131.33 0
P O 73.84 131.33 205.17 131.33 205.17 0
Q P 50.32 205.17 255.49 205.17 255.49 0
R Q 17.47 255.49 272.96 255.49 272.96 0
S R 24.85 272.96 297.81 272.96 297.81 0
T S 11.97 297.81 309.78 297.81 309.78 0
U T 9.49 309.78 319.27 309.78 319.27 0
8.8. Gantt Chart
Gantt chart is used to provide an immediate comparison between schedule and reality. Its
represent process time data in good visual manner, Gantt chart is as shown in Fig. 8.2 which
prepared using Table 8.6. This Gantt chart represents relation between activity and their
process timing as shown in Fig 8.2.

59. 42

60. 43
8.9. Probability to complete less than Critical time
To complete all activity critical time required 319.27 Min.(Refer Table 8.5) but other path also
available which consume less time, so to find probability to complete operation using other
path in 315.17 Min. or in 308.74 Min. (Refer Table 8.5) in future need to find variance for all
critical activity as shown in Table 8.7 below. Variance for Critical Activity in Table 8.7 is find out
using following equation -
Variance =
Pessimistic Time − Optimistic Time
6
2
Example of Variance for Critical Activity F –
Variance =
7.60 − 4.21
6
2
= 0.3192
In this same way find variance for each Critical Activity using above equation.
Table 8.7 Variance for Critical Activities
Activity Optimistic
Time (Min.)
Pessimistic
Time (Min.)
Variance
F 4.21 7.6 0.3192
G 1.45 2.47 0.0289
H 0.53 0.9 0.0038
J 52.26 64.09 3.8875
M 13.42 15.59 0.1308
N 7.68 42.67 34.0083
O 20.24 24.64 0.5378
P 30.89 120.56 223.3530
Q 39.83 63.88 16.0694
R 15.19 19.60 0.5402
S 20.83 30.10 2.3896
T 2.80 0.89 22.3256
U 8.37 10.57 0.1351
Total Variance 303.5941

61. 44
Using Variance find out Standard Deviation for Critical Activity as follows using equation –
Standard Deviation = Total Variance
2
= 303.5941
2
= 17.42
Now,
Probability to complate operation in 315.17 Min. =
315.17 − 319.27
17.42
= 0.24 (Ignore negative Sign)
= 0.5948 (using Z Table)
So, there are 59.48 % chances or probability that operation is completed in 315.17 Min. for
same amount of output 35 units.
Now,
Probability to complate operation in 315.17 Min. =
308.74 − 319.27
17.42
= 0.60 (Ignore negative Sign)
= 0.7257 (using Z Table)
So, there are 72.57 % chances or probability that operation is completed in 308.74 Min. for
same amount of output 35 units.
8.10. Hypothesis Testing
Null Hypothesis: There is no change in each process time whenever it perform
Alternative Hypothesis: There is change in each process time whenever it perform
For this Hypothesis testing is done t test on SPSS on Most Likable Time (Average Time) of
each Production process A to U (Refer Table 8.3) because want to find difference as shown in
Table 8.8 and using this SPSS find out tCalculated = 2.703.
But at same time for 20 degree of freedom, t value using t table at 0.05 α two tailed, tTable =
2.086

62. 45
Table 8.8 Hypothesis Testing 2, One-Sample Test
Test Value = 0
t Df
Sig. (2-
tailed)
Mean
Difference
95% Confidence Interval
of the Difference
Lower Upper
Process Time 2.703 20 .014 11.94094 2.7257 21.1561
8.10.1. Interpretation
Here tCalculated > tTable, So Null Hypothesis is rejected and Thus, It is concluded that There is
change in each process time whenever it perform.
8.11. Chapter Summery
Using Chapter find out that in C.M. Smith and Sons Ltd. Foundry Division there is difference in
process time whenever it perform which effect overall production, and critical path for
production process FGHJMNOPQRSTU which covered mostly all activity so delay is not
possible in these activity aspect Wash Sand Core making and Melting Process.
But using this production process timing Company able to manufacture around 840 units which
more than production plan 661 units (Refer Chapter 7), So If Company work in this rate than
also they achieve their production plan but not able to achieve means other problem like
Inventory and Machine maintenance with Man power created break down of plant which affect
more to Production plan, But when ever Company production run its run at good adequate
speed.

63. Chapter 9
Process Failure Mode and Effect Analysis

64. 46
9.1. Introduction
Failure Mode and Effect Analysis (FMEA) is a proactive, team based, and systematic
approach for identifying the ways a process or design can fail, why it might fail, and how it can
be made safer. Design Failure Mode and Effect Analysis analyze product design before
release to production, with a focus on product function and mainly aim for this is to ensure
product quality. Process Failure Mode and Effect Analysis are used to analyze manufacturing
and assembly processes after they are implemented. PFMEAs take a systems approach to
finding the weaknesses in the processes, assessing the effects these weaknesses have on the
system, and most importantly fixing the weaknesses before an event occurs. Putting fixes in
place that eliminate or reduce the risk of the failure modes will result in a safer and more
efficient system from which both the patients and the staff benefit.
C.M. Smith and Sons Ltd. Foundry Division able to achieve 73.49 % (Refer Chapter 7) of its
production plan in actual that mean something going wrong in its Foundry Division production
process. Production process failures occurred due to various reasons and to find which failure
out of all effect more to production rate Process Failure Mode and Effect Analysis required.
Note: This chapter is based on 10 March, 2013 to 11 June, 2013 production data and failure
occurrence. In this section Man Power Problem occurred 56 times & GEB Electricity Problem
occurred 9 times, But it not consider here because both are equally important & without them
plant can't run.
9.2. PFMEA Components
Fig. 9.1 PFMEA Components
9.2.1. Severity (S)
In PFMEA Severity shows important of that process failure and its effect on further process.
For PFMEA in Severity one should give score to process failure based on its important and
effect on further process. Here used rating scale 1 to 10 to give score and that meaning is
described in Table 9.1.
PFMEA Components
Severity Occurrence Detection

65. 47
Table 9.1 Severity Rating Scale Description
Rating Description
1 Would not affect further process
2 Very Remote chances that it effect on further process
3 Remote chances that it effect on further process
4 Very Low chances that it effect on further process
5 Low effect on further process
6 Moderate effect on further process
7 Moderately High effect on further process
8 High chances that it effect on further process
9 Very High chances that it effect on further process
10 Complete failure of further process
9.2.2. Occurrence (O)
In PFMEA Occurrence shows frequency with which a given cause occurred and creates failure
modes. For PFMEA in Occurrence one should give score to it based on process failure
occurrence frequency (Probability). Here used rating scale 1 to 10 to give score and that
meaning is described in Table 9.2 and Frequency of process failure occurred (Number of
times) and its probability is as shown in Table 9.3, which used further in this Chapter in Section
9.3 in Table 9.5 to give Occurrence score.
Table 9.2 Occurrence Rating Scale Description
Rating Description
1 Occurrence probability range in between 0.00 to 0.10
2 Occurrence probability range in between 0.11 to 0.20
3 Occurrence probability range in between 0.21 to 0.30
4 Occurrence probability range in between 0.31 to 0.40
5 Occurrence probability range in between 0.41 to 0.50
6 Occurrence probability range in between 0.51 to 0.60
7 Occurrence probability range in between 0.61 to 0.70
8 Occurrence probability range in between 0.71 to 0.80
9 Occurrence probability range in between 0.81 to 0.90
10 Occurrence probability range in between 0.91 to 1.00

66. 48
Table 9.3 Probability of Failure occurred
Process Failure Cause Occurred Probability
Core Making No Wash Sand 4 0.014
CO2 Core
Making
No Mould Sand 3 0.012
No CO2 2 0.008
No Sildrone Acid 1 0.004
Moulding Alpha 450 M/c 18 0.067
Alpha 900 M/c 5 0.019
Alpha 450 M/c crane 8 0.029
Alpha 900 M/c crane 3 0.012
Pattern Problem 1 0.004
Dust Jamming 1 0.004
Hopper Problem 2 0.008
Black Sand Mixer Problem 14 0.052
Black Sand Problem 9 0.034
No CO2 Core 18 0.067
No Cold Box 7 0.026
No Chiplan 1 0.004
No Collide Paste & Thinner 1 0.004
Mould filter Problem 2 0.008
No. 7 BE Problem 14 0.052
No. 14 BE Problem 9 0.034
No. 19 BE Problem 10 0.037
No. 13 BC Problem 4 0.015
No. 20 BC Problem 11 0.041
No. 31 BC Problem 8 0.029
Air Problem 52 0.195
Melting Furnace 1 0.004
No Metal 30 0.112
No Carbon 1 0.004
Pouring Metal Delay 20 0.074
Solidification - 0 0
Knock Out Knockout M/c 3 0.012
Knockout crane 4 0.015

67. 49
Decoreing - 0 0
Sort Blasting - 0 0
Chipping - 0 0
Dispatching - 0 0
Total 267 1
9.2.3. Detection (D)
In PFMEA Detection shows the ability of the current control system to detect or prevent a
given failure. For PFMEA in Detection one should give score to process failure based on ability
of its detection. Here used rating scale 1 to 10 to give score and that meaning is described in
Table 9.4.
Table 9.4 Detection Rating Scale Description
Rating Description
1 System will detect potential cause and subsequent failure mode
2 Very high chance the system will detect potential cause and subsequent failure mode
3 High chance the system will detect potential cause and subsequent failure mode
4 Moderately High the system will detect potential cause and subsequent failure mode
5 Moderate the system will detect potential cause and subsequent failure mode
6 Low the system will detect potential cause and subsequent failure mode
7 Very low the system will detect potential cause and subsequent failure mode
8 Remote the system will detect potential cause and subsequent failure mode
9 Very Remote the system will detect potential cause and subsequent failure mode
10 System can’t detect potential cause and subsequent failure mode
9.3. Risk Priority Number (RPN)
In PFMEA using Risk Priority Number one can know which failure out of all effect more to
production rate. RPN is product of Severity, Occurrence and Detection scores. Here score is
given to Severity, Occurrence and Detection in range 1 to 10 (Refer Table 9.5) that’s why get
RPN score out of 1000 means failure which have RPN near to 100 or more than 100 is given
priority and try to control that that failure by considering corrective action.

68. 50
Table.9.5.ProcessFailureandEffectAnalysisSheet
CorrectiveAction
-
-
-
-
-
-
-
-
-
-
-
-
-
-
RPN
48
42
49
49
72
72
72
72
72
28
54
36
40
14
D
6
6
7
7
9
9
9
9
8
4
9
6
4
2
O
1
1
1
1
1
1
1
1
1
1
1
1
1
1
S
8
7
7
7
8
8
8
8
9
7
6
6
10
7
FailureEffect
Nocoldbox
NoCO2Core
CO2Corecan’tgenerate
NoCO2Core
ProcessclosedifAlpha900also
notworkingotherwiseproduction
ratedecreased
ProcessclosedifAlpha450also
notworkingotherwiseproduction
ratedecreased
Alpha450M/cclosed
Alpha900M/cclosed
Accuracydecrease
Machinesmoothnessdecrease
NoBlackSandifSafetyHopperis
empty
NoBlacksandsuppliedifsecond
mixernotworking
ProcessStop
MouldBoxnotgenerateinwhichit
required
Failure
NoWashSand
NoMouldSand
NoCO2
NoSildroneAcid
Alpha450M/c
Alpha900M/c
Alpha450M/ccrane
Alpha900M/c
PatternProblem
DustJamming
HopperProblem
BlackSandMixer
Problem
BlackSandProblem
NoCO2Core
Process
CoreMaking
CO2CoreMaking
Moulding

69. 51
Table9.5.(Continue…)
CorrectiveAction
-
-
-
-
BydoingpreventiveMaintenance
decreaseitfailurerate
BydoingpreventiveMaintenance
decreaseitfailurerate
BydoingpreventiveMaintenance
decreaseitfailurerate
BydoingpreventiveMaintenance
decreaseitfailurerate
BydoingpreventiveMaintenance
decreaseitfailurerate
BydoingpreventiveMaintenance
decreaseitfailurerate
BydoingpreventiveMaintenanceof
compressordecreasethisproblem,
otherwisetodecreaseloadaddnew
compressor
RPN
24
24
70
49
90
90
90
90
90
90
144
D
3
4
7
7
9
9
9
9
9
9
8
O
1
1
1
1
1
1
1
1
1
1
2
S
8
6
10
7
10
10
10
10
10
10
9
Failure
MouldBoxmakingisnotpossible
MouldBoxnotgenerateinwhichit
required
Processclosed
MouldBoxgeneratebutimpurity
levelincreaseinpouring
NoBlackSandsupplied
NoBlackSandsupplied
NoBlackSandsupplied
NoBlackSandsupplied
NoBlackSandsupplied
NoBlackSandsupplied
Processclosed
FailureCause
NoColdBox
NoChiplan
NoCollidePaste&
Thinner
MouldfilterProblem
No.7BEProblem
No.14BEProblem
No.19BEProblem
No.13BCProblem
No.20BCProblem
No.31BCProblem
AirPressure
Process
Moulding

70. 52
Table9.5.(Continue…)
CorrectiveAction
-
BydoingeffectiveInventory
Managementonecanreducethis
problem
-
-
-
-
-
-
-
-
-
RPN
18
120
70
18
-
63
63
-
-
-
-
D
3
6
7
3
-
9
9
-
-
-
-
O
1
2
1
1
-
1
1
-
-
-
-
S
6
10
10
6
-
7
7
-
-
-
-
FailureEffect
Processclosedifsecondfurnace
alsonotworking
Processclosed
Processclosed
Processtakemoretime
-
ProcessclosedifsecondKnockout
M/calsonotworkingotherwise
productionratedecreased
ProcessclosedifsecondKnockout
M/ccranealsonotworking
otherwiseproductionratedecreased
-
-
-
-
Failure
Furnace
NoMetal
NoCarbon
MetalDelay
-
KnockoutM/c
Knockoutcrane
-
-
-
-
Process
Melting
Pouring
Solidification
KnockOut
Decoreing
SortBlasting
Chipping
Dispatching

71. 53
9.4. Process Failure Mode and Effect Analysis sheet
PFMEA sheet has universal approved format and based on it PFMEA sheet is as shown in
Table 9.5. In this sheet Severity is denoted as S, Occurrence is denoted as O and Detection is
denoted as D. As shown in table 9.5 in this sheet failure effect and it corrective action also
mentioned if it RPN near to 100 or more than 100.
Note: Score given to Severity and Detection is totally based on researcher thinking.
By using PFMEA sheet (Refer Table 9.5) one can find out that Air Pressure problem effect
production rate more than any other failure as its RPN score is 144. By doing preventive
Maintenance of compressor decrease this problem, otherwise to decrease load by adding new
compressor solve this problem. Secondly Metal (Raw material) problem effect production rate
as its RPN score is 120. To solve this problem effective Inventory Management required
means by maintaining safety stock of metal one can reduce this problem (Refer Chapter 10).
Other failure occurred in 7, 14 and 19 no. Bucket Elevator and 13, 20 and 31 no. Belt
Conveyor as each failure RPN score 90 near to 100 individually. To avoid these failures
preventive maintenance of Bucket Elevator and Belt Conveyor required.
If C.M. Smith and Sons Ltd. will solve these failure problem and one can revise this PFMEA
activity then Alpha 450 machine failure is become major problem that effect production rate.
As PFMEA is continuous process towards improvement after fixing recent failure one should
get other failures which RPN near to 100 or more than 100 and by doing this no. of times and
solving all failure problem on permanent bases production system become more efficient and
accurate.
9.5. Chapter Summery
In this Chapter find out various failure occurred in C.M. Smith and Sons Ltd. Foundry Division
along with its appropriate solution and also which failure effect more using PFMEA Analysis,
by solving it that one failure immediately Company suffer less compare to solving others like
solving Air Problem and Raw material problem, Company easily go toward achieving
production plan.

72. Chapter 10
Inventory Management

73. 54
10.1. Introduction
Inventory is a stock of items kept by an organization to meet internal or external customer
demand. Inventory includes materials – raw, in process, finished packaging, spares and other
stocked in order to meet an unexpected demand or distribution in future. Inventory
management means overseeing and controlling of the ordering, storage and use of
components that a company will use in the production of the items it will sell as well as the
overseeing and controlling quantities of finished products for sale. Successful Inventory
Management involves creating a purchasing plan that will ensure that item are available when
they are needed and keeping record of existing inventory and its use.
By referring Chapter 9 one can know that in C.M. Smith and Sons Ltd. Foundry Division 29.11
% problems out of all problems is due to Inventories. That means Company not carries safety
stock, actually not know all inventories safety stock level; so not order Inventories at accurate
time and also not know economic order quantity for all Inventories. In this chapter all major
Inventories which used in Foundry and which create problem like process failure are analyze
and their safety stock and economic order quantity are find out. In this chapter Inventory are
analyze for actual production rate- 485 units (Refer Chapter 7), for plan production rate- 661
units (Refer Chapter 7) and for full production capacity- 1260 units (Refer Chapter 7) .
Note: In this chapter mainly focus on Inventories which needed to start production (Raw
Material), means Work in Progress Inventories and Finish Good Inventories are not consider;
and used all data which provided by store based on last orders
10.2. Quantity received per order and demanded per day
In C.M. Smith and Sons ltd. mostly Purchase Department are not mention quantity in order,
but just informs supplier send Inventories because all supplier are supplied Inventories form
long time so send materials based on transportation facility and all most standard rate. Actually
all supplier know how much and when to send materials. In this section all data based on last
order received for respective Inventories as shown in Table 10.1 with respective units.
Regarding Inventories demand per day data are available in store department for actual
production rate 485 units per day and based on it for plan production rate 661 units per day
and full capacity 1260 units per day demand per day is find out using simply comparison
method and judgment as shown in Table 10.1. Example of Comparison method for Wash
Sand -

74. 55
For 485 units required 12 Tonne of Wash Sand
So, For 661 units required ___ Tonne of Wash Sand?
Table 10.1 Quantity received and Inventory demand / day
No. Name of Inventory Order
Received
Demand / day
Actual
Production
Plan
Production
Full
Capacity
1 Wash Sand 10 Tonne 12 Tonne 16.5 Tonne 31.5 Tonne
2 Moulding Sand 10 Tonne 1 Tonne 1.4 Tonne 2.6 Tonne
3 Coal Dust 5000 Kg 1450 Kg 1980 Kg 3800 Kg
4 Bentonite Powder 5000 Kg 1450 Kg 1980 Kg 3800 Kg
5 Pig Iron 30 Tonne 4.62 Tonne 6.3 Tonne 12 Tonne
6 MS Scrap 10 Tonne 4.62 Tonne 6.3 Tonne 12 Tonne
7 Rejection Returns
Runner-Riser - 6.3 Tonne 8.6 Tonne 16.4 Tonne
Foundry Rejection - 1.15 Tonne 1.57 Tonne 3 Tonne
Other Level Rejection - 0.54 Tonne 0.73 Tonne 1.4 Tonne
Chip from Machining - 0.078 Tonne 0.1 Tonne 0.2 Tonne
Outside Rejection 15 Tonne 5.77 Tonne 7.87 Tonne 15 Tonne
8 Hardener 585 Liter 51 Liter 69 Liter 132 Liter
9 Raisin 585 Liter 51 Liter 69 Liter 132 Liter
10 Min Gas 630 Kg 55 Kg 75 Kg 142 Kg
11 Collide Paste 200 Liter 18 Liter 24 Liter 45 Liter
12 Thinner 1000 Liter 600 Liter 817 Liter 1500 Liter
13 Sildrone Acid 2000 Liter 25 Liter 35 Liter 65 Liter
14 CO2 Gas 900 Kg 90 Kg 126 Kg 234 Kg
15 Mould Filter 15000 Piece 485 Piece 661 Piece 1260 Piece
16 Carbon 9577 Kg 212.5 Kg 290 Kg 552 Kg
17 Fe-Silicon 5320 Kg 74 Kg 101 Kg 192 Kg
18 Fe-Mn 1330 Kg 18.5 Kg 25 Kg 48 Kg
19 Iron Sulfur 417 Kg 9.23 Kg 12.6 Kg 24 Kg
20 Slag fix Powder 50 Kg 0.14 Kg 0.19 Kg 0.36 Kg
21 Ferro Inoculants Powder 350 Kg 4.85 Kg 6.61 Kg 12.6 Kg

75. 56
=
661 ∗ 12
485
≈16.5 Tonne
In this same way find for all and used judgment also.
Company used Rejection Return to utilize it metal in melting process. As Inside Rejection
Return Runner-Riser material, Foundry Rejection material, Other Level Plant Rejection and
Chip from Machining are used. To find this material demand consider plant run at full capacity
and find it demand as shown below and used this to find actual and plan production rate each
of them demand using Comparison method.
One Cast Runner-Riser weight is around 13 Kg, so at Full Capacity Runner Riser Demand /
day which Company get every day-
Runner − Riser Demand per day at Full Capacity = 13 ∗ 1260
= 16380 Kg ≈ 16.4 Tonne
Foundry rejection rate is around 8 %, and at Full Capacity Company produce 450 units of 37
Kg and 810 units of 25 Kg normally, so Foundry Rejection Demand / day which Company get
every day –
Foundry Rejection Demand per day at Full Capacity = 450 ∗ 37 + 810 ∗ 25 ∗ 0.08
= 2952 Kg ≈ 3 Tonne
Other Level Rejection is around 4 %, and at Full Capacity Company produce 450 units of 37
Kg and 810 units of 25 Kg normally, so Other Level Rejection Demand / day which Company
get every day –
Other Level Rejection Demand per day at Full Capacity = 450 ∗ 37 + 810 ∗ 25 ∗ 0.04
= 1476 Kg ≈ 1.4 Tonne
From Machining shop Company get Chip and its demand for full capacity is around 200 Kg
find using judgment and Outside rejection means rejection by other Company unit or Outer
Parties is come in quantity of 15 Tonne per order and used 15 Tonne itself per day for Full
Capacity.

76. 57
10.3. Safety Stock
For Inventories Safety Stock is carried to prevent stock outs to reduce risk. Because of factors
such as fluctuating in customer demand, forecast inaccuracy and variability in lead times for
raw materials. Lead time is the time difference between the placing of an order and actually
receiving the Inventory ordered.
C.M. Smith and Sons Ltd. Foundry Division are not maintaining it safety stock and that’s why
Inventories problem created (Refer Chapter 7). For this section for inventories used last order
receiving lead time, and based on that Safety Stock for each Inventory find out using equation-
Inventory Safety Stock = Inventory Lead time ∗ Inventory Demand/day
For Inventory Demand / day for each Inventory used Table 10.1 as per requirement. Example
of finding Safety Stock for Wash Sand –
Wash Sand Safety Stock at Actual Production rate = 2 ∗ 12
= 24 Tonne
Same way Find Safety Stock foe other Inventories as shown in Table 10.2.

77. 58
Table 10.2 Safety Stock for Inventories
No. Name of Inventory Lead
Time
(days)
Safety Stock / day
Actual
Production
Plan
Production
Full
Capacity
1 Wash Sand 2 24 Tonne 33 Tonne 63 Tonne
2 Moulding Sand 2 2 Tonne 2.8 Tonne 5.2 Tonne
3 Coal Dust 3 4350 Kg 5940 Kg 11400 Kg
4 Bentonite Powder 3 4350 Kg 5940 Kg 11400 Kg
5 Pig Iron 2 9.24 Tonne 12.6 Tonne 24 Tonne
6 MS Scrap 2 9.24 Tonne 12.6 Tonne 24 Tonne
7 Rejection Returns
Runner-Riser 1 6.3 Tonne 8.6 Tonne 16.4 Tonne
Foundry Rejection 1 1.15 Tonne 1.57 Tonne 3 Tonne
Other Level Rejection 1 0.54 Tonne 0.73 Tonne 1.4 Tonne
Chip from Machining 1 0.078 Tonne 0.1 Tonne 0.2 Tonne
Outside Rejection 10 57.7 Tonne 78.7 Tonne 150 Tonne
8 Hardener 2 102 Liter 138 Liter 264 Liter
9 Raisin 2 102 Liter 138 Liter 264 Liter
10 Min Gas 2 110 Kg 150 Kg 284 Kg
11 Collide Paste 2 36 Liter 48 Liter 90 Liter
12 Thinner 2 1200 Liter 1634 Liter 3000 Liter
13 Sildrone Acid 3 75 Liter 105 Liter 195 Liter
14 CO2 Gas 2 180 Kg 252 Kg 468 Kg
15 Mould Filter 2 970 Piece 1322 Piece 2520 Piece
16 Carbon 3 637.5 Kg 870 Kg 1656 Kg
17 Fe-Silicon 8 592 Kg 808 Kg 1536 Kg
18 Fe-Mn 8 148 Kg 200 Kg 384 Kg
19 Iron Sulfur 2 18.46 Kg 25.2 Kg 48 Kg
20 Slag fix Powder 2 0.28 Kg 0.38 Kg 0.72 Kg
21 Ferro Inoculants Powder 2 9.7 Kg 13.22 Kg 25.2 Kg
10.4. Ordering Cost
Note: In this section consider that give order to that supplier which gives Inventories at
minimum out of more than one supplier and all cost consider based on last order.

78. 59
Ordering Cost is simply the total of expenses incurred during placing an order (purchase order)
to receiving that order. Ordering Cost include cost related to the clerical work of preparing,
releasing, monitoring and receiving order, the physical handling of the goods, inspections and
setup costs, as applicable.
In C.M. Smith and Sons Ltd. purchase department not give order in quantity but just inform
supplier to send Inventories so here quantity received is consider as quantity order. In C.M.
Smith and Sons Ltd. only those cost consider as ordering cost which occurred when company
get order like Inventory cost, transportation cost, etc. as shown in Table 10.3.
As shown in Table 10.3 Transportation cost is two types for company, in first transportation
cost per unit like Wash Sand and second transportation cost for whole order like Collide Paste.
For transportation cost per unit ordering cost find out using equation,
Ordering Cost = [Cost per unit + (Cost per unit ∗ % VAT) + Cost per unit ∗ % Excise duty
− (Cost per unit ∗ %Discount rate) + Transportatrion Cost] ∗ Quantity Order
Example-
Wash Sand Ordering Cost
= [1000 + (1000 ∗ 0.05) + 1000 ∗ 0.1236 − (1000 ∗ 0.00) + 700] ∗ 10
= Rs. 17500
For transportation cost for whole order ordering cost find out using equation,
Ordering Cost = Cost per unit + Cost per unit ∗ % VAT + Cost per unit ∗ % Excise duty
− Cost per unit ∗ %Discount rate ∗ Quantity Order + Transportation Cost
Example-
Collide Paste Ordering Cost = 41 + 41 ∗ 0.15 + 41 ∗ 0.1236 − 41 ∗ 0.00 ∗ 200 + 120
= Rs. 10564
For Rejection Return Ordering Cost not possible because it inside of Company and outside
rejection also not order by Company.

79. 60
Table10.3OrderingCostforinventories
Ordering
Cost(Rs.)
17500
10150
69829
9450
1082294
300510
-
-
-
-
-
118315
Transportation
Cost(Rs.)
700/Tonne
700/Tonne
-
-
-
-
-
-
-
-
-
-
Discou
nton
Cost
-
-
-
-
-
-
-
-
-
-
-
-
Excise
Dutyon
Cost
-
-
12.36%
-
12.36%
-
-
-
-
-
-
12.36%
VATon
Cost
5%
5%
5%
5%
5%
-
-
-
-
-
-
-
Costperunit
(Rs.)
1000/Tonne
300/Tonne
11.9/Kg
1.8/Kg
30740/Tonne
30051/Tonne
-
-
-
-
-
180/Liter
Quantity
Order
10Tonne
10Tonne
5000Kg
5000Kg
30Tonne
10Tonne
-
-
-
-
-
585Liter
NameofInventory
WashSand
MouldingSand
CoalDust
BentonitePowder
PigIron
MSScrap
RejectionReturns
Runner-Riser
FoundryRejection
OtherLevelRejection
ChipfromMachining
OutsideRejection
Hardener
No.
1
2
3
4
5
6
7
8

80. 61
Table10.3(Continue…)
Ordering
Cost(Rs.)
48641
106180
10564
28166
29400
18428
42225
430363
446880
93653
21176
72
32708
Transportation
Cost(Rs.)
-
-
120
-
-
-
-
-
-
-
-
-
-
Discou
nton
Cost
-
-
-
-
-
-
25%
-
-
-
-
-
-
Excise
Dutyon
Cost
12.36%
12.36%
12.36%
12.36%
-
-
-
12.36%
-
12.36%
12.36%
-
-
VATon
Cost
-
-
15%
5%
5%
5%
15%
5%
5%
5%
5%
5%
5%
Costperunit
(Rs.)
74/Liter
150/Kg
41/Liter
24/Liter
14/Liter
19.5/Kg
3.35/Piece
38.29/Kg
80/Kg
60/Kg
43.27/Kg
11.5/Kg
89/Kg
Quantity
Order
585Liter
630Kg
200Liter
1000Liter
2000Liter
900Kg
15000
Piece9577Kg
5320Kg
1330Kg
417Kg
50Kg
350Kg
NameofInventory
Raisin
MinGas
CollidePaste
Thinner
SildroneAcid
CO2Gas
MouldFilter
Carbon
Fe-Silicon
Fe-Mn
IronSulfur
SlagfixPowder
FerroInoculantsPowder
No.
9
10
11
12
13
14
15
16
17
18
19
20
21

81. 62
10.5. Carrying Cost
Carrying Cost is the cost associated with holding one unit of an item in stock for one period of
time. In Carrying Cost included various elements as shown in Fig. 10.1. But out of this
elements Opportunity Cost and Taxes not concluded here because Company don’t store
safety stock so Opportunity Cost and Taxes on holding Inventories are not occurred.
Fig. 10.1 Carrying Cost Elements
10.5.1. Inventory handling cost (Hc)
Inventory handling cost means cost occurred during Inventories movement from one place to
other inside Company. For this purpose in C.M. Smith and Sons Ltd. have 12 helpers and out
of this in Foundry Division only 6 helpers are used and each of them wages is around Rs. 200,
so total Rs. 1200 is Inventory handling cost per day which divided for each inventory by
considering Order Received (Refer Table 10.1) as cost driver. Each Inventory handling cost is
found out using simply comparison method and judgment as shown in Table 10.4. Example of
Comparison method for Wash Sand Handling Cost –
Overall Total Material Received without considering units = 122900
Out of 122900 total material received 10000 of Wash Sand
So, Out of Rs. 1200 of handling cost Rs.___ is Cost of Wash Sand?
=
1200 ∗ 10000
122900
= Rs. 97.64
In this same way find for all and used judgment also.
Carrying Cost Elements
Handling
cost
Security
Cost
Storing
Cost
Insurance
Cost
Electricity
Cost
Opportunity
Cost
Taxes

82. 63
Table 10.4 Inventory Handling Cost / day
Total Inventory Handling Cost = Rs. 1200 / day
No. Name of Inventory Inventory Handling Cost / day
(Rs.)
1 Wash Sand 97.64
2 Moulding Sand 97.64
3 Coal Dust 48.82
4 Bentonite Powder 48.82
5 Pig Iron 292.92
6 MS Scrap 97.64
7 Rejection Returns
Runner-Riser -
Foundry Rejection -
Other Level Rejection -
Chip from Machining -
Outside Rejection 146.46
8 Hardener 5.71
9 Raisin 5.71
10 Min Gas 6.15
11 Collide Paste 1.95
12 Thinner 9.76
13 Sildrone Acid 19.53
14 CO2 Gas 8.79
15 Mould Filter 146.46
16 Carbon 93.51
17 Fe-Silicon 51.94
18 Fe-Mn 12.99
19 Iron Sulfur 4.07
20 Slag fix Powder 0.07
21 Ferro Inoculants Powder 3.42
10.5.2. Security Cost (SEc)
Inventory Security is very essential thing for any Company because in production used costly
material and some time any wrong incident close production also. For Security purpose in
C.M. Smith and Sons Ltd. have around 15 security guard and out of this take 5 security guard

83. 64
for Foundry Division (because Company have three part Foundry, Machining and
Administrative Office) and each of them salary is around Rs.4250, so total security cost is Rs.
21250 per month means Rs. 708.33 per day (Consider 30 day month) which divided for each
inventory by considering Safety Stock (Refer Table 10.2) as cost driver.
Table 10.5 Security Cost / day
Total Security Cost = Rs. 708.33 / day
No. Name of Inventory Security Cost / day (Rs.)
1 Wash Sand 139.13
2 Moulding Sand 11.48
3 Coal Dust 25.17
4 Bentonite Powder 25.17
5 Pig Iron 53.00
6 MS Scrap 53.00
7 Rejection Returns
Runner-Riser 36.22
Foundry Rejection 6.63
Other Level Rejection 3.09
Chip from Machining 0.44
Outside Rejection 331.27
8 Hardener 0.58
9 Raisin 0.58
10 Min Gas 0.63
11 Collide Paste 0.20
12 Thinner 6.63
13 Sildrone Acid 0.43
14 CO2 Gas 1.03
15 Mould Filter 5.56
16 Carbon 3.66
17 Fe-Silicon 3.39
18 Fe-Mn 0.85
19 Iron Sulfur 0.11
20 Slag fix Powder 0.02
21 Ferro Inoculants Powder 0.06

84. 65
Each Inventory security cost is found out using simply comparison method and judgment as
shown in Table 10.5. Example of Comparison method for Wash Sand Security Cost –
Overall Total Safety Stock without considering units (At Full Capacity) = 320734.92
Out of 320734.92 total safety stock 63000 of Wash Sand
So, Out off Rs. 708.33 of security cost Rs.___ is Cost of Wash Sand?
=
708.33 ∗ 63000
320734.92
= Rs. 139.13
In this same way find for all and used judgment also.
Note: Full Capacity Safety Stock is used here because Safety stock is find out using demand
per day and for Plan Production rate and Full capacity demand per day is find out in
comparison of actual production rate demand per day, So for Actual Production Rate, Plan
production Rate and at Full Capacity each Inventory Safety stock proportion is quite same so
take any one out of Actual Production Rate, Plan production Rate and Full Capacity Safety
Stock.
10.5.3. Storing Cost (STc)
Inventory Storing Cost means cost which occurred when store any inventory. Storing cost
includes warehouse rent charges and store department person salary. For Storing Inventory
purpose in C.M. Smith and Sons Ltd. Foundry Division don’t have ware house rent but store
department and have 3 person works on it and those person total salary is around Rs.16800
per month, means Rs. 560 per day (Consider 30 day month) which divided for each inventory
by considering Safety Stock (Refer Table 10.2) as cost driver, But used only those inventory
safety stock which stored in Store department that means those inventories not store in store
department are not allocated this cost. Each Inventory storing cost which store in store
department is find out using simply comparison method and judgment as shown in Table 10.6.
Example of Comparison method for Hardener Storing Cost –
Overall Total Safety Stock which store in store department without considering units (At Full
Capacity)
= 10734.92

85. 66
Table 10.6 Storing Cost / day
Total Storing Cost = Rs. 560 / day
No. Name of Inventory Storing Cost / day (Rs.)
1 Wash Sand -
2 Moulding Sand -
3 Coal Dust -
4 Bentonite Powder -
5 Pig Iron -
6 MS Scrap -
7 Rejection Returns
Runner-Riser -
Foundry Rejection -
Other Level Rejection -
Chip from Machining -
Outside Rejection -
8 Hardener 13.77
9 Raisin 13.77
10 Min Gas 14.82
11 Collide Paste 4.70
12 Thinner 156.49
13 Sildrone Acid 10.17
14 CO2 Gas 24.41
15 Mould Filter 131.46
16 Carbon 86.39
17 Fe-Silicon 80.13
18 Fe-Mn 20.03
19 Iron Sulfur 2.50
20 Slag fix Powder 0.04
21 Ferro Inoculants Powder 1.32
Out of 10734.92 total safeties stock which store in store department 264 of Hardener
So, Out off Rs. 560 of storing cost Rs.___ is Cost of Hardener?
=
560 ∗ 264
10734.92
= Rs. 13.77

86. 67
In this same way find for all and used judgment also.
Note: Full Capacity Safety Stock is used here because Safety stock is find out using demand
per day and for Plan Production rate and Full capacity demand per day is find out in
comparison of actual production rate demand per day, So for Actual Production Rate, Plan
production Rate and at Full Capacity each Inventory Safety stock proportion is quite same so
take any one out of Actual Production Rate, Plan production Rate and Full Capacity Safety
Stock.
10.5.4. Insurance Cost (Ic)
Every company takes Insurance to get more protection against any unavoidable and
unpredictable risk. C.M. Smith and Sons Ltd. have Insurance which provides protection
against earthquake and fire covering insurance and yearly premium for Insurance is around
Rs. 450000. Company have 2 major production section – Foundry and Marching so this
Insurance premium charge half way to both. And consider that company investment is 1/3 in
its inventories every time and also 365 days in year.
So,
Inventory Insurance Cost / day for Foundry Division =
450000
2 ∗ 3 ∗ 365
= Rs. 205.48
Inventory Insurance Cost is divided for each inventory by considering Safety Stock (Refer
Table 10.2) as cost driver. Each Inventory Insurance cost is found out using simply
comparison method and judgment as shown in Table 10.5. Example of Comparison method
for Wash Sand Insurance Cost –
Overall Total Safety Stock without considering units (At Full Capacity) = 320734.92
Out of 320734.92 total safety stock 63000 of Wash Sand
So, Out off Rs. 205.48 of Insurance cost Rs.___ is Cost of Wash Sand?
=
205.48 ∗ 63000
320734.92
= Rs. 40.36
In this same way find for all and used judgment also.

87. 68
Table 10.7 Insurance Cost / day
Total Insurance Cost = Rs. 205.48 / day
No. Name of Inventory Insurance Cost / day (Rs.)
1 Wash Sand 40.36
2 Moulding Sand 3.33
3 Coal Dust 7.30
4 Bentonite Powder 7.30
5 Pig Iron 15.38
6 MS Scrap 15.38
7 Rejection Returns
Runner-Riser 10.51
Foundry Rejection 1.92
Other Level Rejection 0.90
Chip from Machining 0.13
Outside Rejection 96.10
8 Hardener 0.17
9 Raisin 0.17
10 Min Gas 0.18
11 Collide Paste 0.06
12 Thinner 1.92
13 Sildrone Acid 0.12
14 CO2 Gas 0.30
15 Mould Filter 1.61
16 Carbon 1.06
17 Fe-Silicon 0.98
18 Fe-Mn 0.25
19 Iron Sulfur 0.03
20 Slag fix Powder 0.00
21 Ferro Inoculants Powder 0.02
Note: Full Capacity Safety Stock is used here because Safety stock is find out using demand
per day and for Plan Production rate and Full capacity demand per day is find out in
comparison of actual production rate demand per day, So for Actual Production Rate, Plan
production Rate and at Full Capacity each Inventory Safety stock proportion is quite same so

88. 69
take any one out of Actual Production Rate, Plan production Rate and Full Capacity Safety
Stock.
10.5.5. Electricity Cost (EC)
Electricity is essential most important thing to run any production company. Electricity is used
in material handling also and required to use material in night shifts. For inventories electricity
charges are find out using electrical instrument used as shown in Table 10.8 and 10.9. This
electricity charges are is divided for each inventory by considering Safety Stock (Refer Table
10.2) as cost driver. Each Inventory electricity cost is found out using simply comparison
method and judgment as shown in Table 10.10. For Wash Sand electricity cost directly
allocated Rs. 10.8 because it’s only used for it. For other Inventories electricity cost find out as
shown in following Examples.
Table 10.8 For Inventories other than in store Electricity Charges / day
Electrical
Instrument
Power Rating
(W)
Electricity Charge
(Rs.)
Inventory
covered
1 Flood Light 150 10.8 Wash Sand
1 Flood Light 150 10.8 Moulding Sand
Coal Dust
Bentonite Powder
1 Flood Light 150 10.8 Pig Iron
MS Scrap
Rejection Returns
Example of Comparison method for Moulding Sand Electricity Cost -
Overall Total Safety Stock of Moulding Sand, Coal Dust and Bentonite Powder without
considering units (At Full Capacity) = 28000
Out of 28000 total safety stock Moulding Sand, Coal Dust and Bentonite Powder 5200 of
Moulding Sand
So, Out off Rs. 10.8 of electricity cost Rs.___ is Cost of Moulding Sand?
=
10.8 ∗ 5200
28000
= Rs. 2.02

89. 70
In this same way find for Coal Dust and Bentonite powder.
Example of Comparison method for Pig Iron Electricity Cost –
Overall Total Safety Stock of Pig iron, MS Scrap and all Rejection Return without considering
units (At Full Capacity) = 219000
Out of 219000 total safety stock of Pig iron, MS Scrap and all Rejection Return 24000 of Pig
Iron
So, Out off Rs. 10.8 of electricity cost Rs.___ is Cost of Pig Iron?
=
10.8 ∗ 24000
219000
= Rs. 1.18
In this same way find for MS Scrap and all Rejection Return.
Table 10.9 Store electricity charges / day
No. Electrical
Instrument
Power Rating
(W)
Electricity Charge
(Rs.)
Inventory Covered
1 4 Tube Light 160 7.68 All Inventory which
in Store2 1 Flood Light 150 5.40
3 1 Ceiling Fan 60 5.76
4 1 Wall Fan 80 2.88
Total Electricity Charges for Store 21.72
Example of Comparison method for Hardener Electricity Cost –
Overall Total Safety Stock of Inventories stored in store without considering units (At Full
Capacity) = 10734.92
Out of 10734.92 total safety stocks of Inventories stored in store 264 of Hardener
So, Out off Rs. 21.72 of electricity cost Rs.___ is Cost of Hardener?
=
21.72 ∗ 264
10734.92
= Rs. 0.53
In this same way find for all other Inventories which store in store.